Specifically, the bank is said to be under investigation for
hiring two bankers whose fathers ran big Chinese companies that
later hired JP Morgan for several assignments.

So that's against the rules now?

Hiring well-connected people?

And that's what U.S. regulators are spending their time
doing--investigating whether J.P. Morgan is hiring well-connected
people in China?

(I don't mean to sound naive here: Obviously, hiring the children
of powerful business executives can provide a relationship-driven
company with a competitive edge. But companies hire the children
of powerful executives all the time, all over the world. And they
also hire people who have excellent industry and government
relationships from childhood, college, business school, and
professional life, all of which are extremely useful. So where do
you draw the line? Will US
banks be investigated when they hire Tim Geithner, Ben Bernanke,
Larry Summers, et al?)